Correlation Between Rubis SCA and Stef SA

Can any of the company-specific risk be diversified away by investing in both Rubis SCA and Stef SA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Rubis SCA and Stef SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rubis SCA and Stef SA, you can compare the effects of market volatilities on Rubis SCA and Stef SA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rubis SCA with a short position of Stef SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rubis SCA and Stef SA.

Diversification Opportunities for Rubis SCA and Stef SA

0.44

Correlation Coefficient

Rubis SCA  Stef SA

Very weak diversification

The 3 months correlation between Rubis and Stef is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Rubis SCA and Stef SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stef SA and Rubis SCA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rubis SCA are associated (or correlated) with Stef SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stef SA has no effect on the direction of Rubis SCA i.e., Rubis SCA and Stef SA go up and down completely randomly.

Pair Corralation between Rubis SCA and Stef SA

Assuming the 90 days trading horizon Rubis SCA is expected to under-perform the Stef SA. In addition to that, Rubis SCA is 1.66 times more volatile than Stef SA. It trades about -0.12 of its total potential returns per unit of risk. Stef SA is currently generating about -0.11 per unit of volatility. If you would invest  14,640  in Stef SA on August 31, 2024 and sell it today you would lose (1,640) from holding Stef SA or give up 11.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Rubis SCA  vs.  Stef SA

Rubis SCA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubis SCA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Stef SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stef SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Rubis SCA and Stef SA

The main advantage of trading using opposite Rubis SCA and Stef SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rubis SCA position performs unexpectedly, Stef SA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Stef SA will offset losses from the drop in Stef SA's long position.

The idea behind Rubis SCA and Stef SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.